Lombard Bank has filed a constitutional court case claiming that it had been denied a fair hearing when the Financial Intelligence Analysis Unit slapped it with a €340,000 fine over alleged money laundering offences.
This is the fifth constitutional court case which the FIAU is facing.
In its application filed against the FIAU and the State Advocate, the bank called on the court to declare that the FIAU investigation and the fine it imposed following its findings were arbitrary and breached its fundamental right to a fair hearing. The bank argued that the law gave the FIAU the power to act as investigator, prosecutor, and judge.
It argued that the FIAU was not an independent and impartial court and therefore out of line with the requisites of the constitution. It held that the law did not protect the bank’s rights and interests and therefore called on the court to rule that this was in breach of its right to a fair hearing.
The bank also argued that the FIAU abused its discretion, had acted arbitrarily, and abused its powers by finding Lombard Bank guilty of criminal charges that have no legal backing.
What did the FIAU find?
The FIAU last October found that the bank had breached five separate AML/CFT provisions. In one case, it had failed to properly ascertain the source of funds of a client who was a politically exposed person. Inspectors also found three other files which lacked adequate information about the source of wealth.
Inspectors also found that periodic reviews of many files were overdue.
In its report, the FIAU expressed concern that not all of the bank's documentation was centralised.
Furthermore, it noted "serious shortcomings" in the way Lombard had scrutinised certain transactions taking place through the customers’ accounts.
Lombard Bank appealed this decision and the fine imposed by the FIAU but told the constitutional court that this appeal did not cover its claims that its right to a fair hearing had been breached. It said it was also facing a lack of equality of arms, including its right not to incriminate itself during the FIAU investigation itself.
Moreover, it said the FIAU had not properly informed the bank about its findings or what charges were going to be issued against it. As a result, it was not in a position to defend itself from these accusations. In addition, a large part of the FIAU’s findings was subjective over guidelines that were issued only two months before the investigation had started.
The bank, therefore, called on the court to declare breaches to its fundamental rights and declare null the FIAU’s decision its regard and pay it moral damages as a result of this breach.
Lombard Bank’s application was signed by lawyers Louis de Gabriele, Kristina Rapa Manche and Diane Bugeja.